Core Viewpoint - The health supplement industry is poised for transformation driven by new channels and customer segments, leading to increased demand for functional products and innovation opportunities [1][2]. Market Overview - The health supplement market in China is projected to reach 232.3 billion in 2024, with a year-on-year growth of 4%. Compared to the U.S., there is significant room for growth in penetration rates across all age groups, particularly as younger consumers develop habits and the population ages [2][3]. - The market is characterized by a fragmented landscape, with the top three companies (Tongrentang, Amway, and H&H) holding a combined market share of 22% [2]. Channel and Demand Dynamics - New channels, particularly e-commerce platforms like Douyin, are expected to drive functionalization in the health supplement industry, with Douyin's GMV for health supplements increasing by 44% year-on-year [3]. - The rise of new customer segments, including younger consumers and those seeking specific health benefits, is creating opportunities for new brands and product categories [3]. Product Category Insights - Fish Oil: Market size between 5-10 billion, with high growth potential due to its anti-inflammatory and beauty benefits [4]. - Coenzyme Q10: Market size of 4.1 billion, with a year-on-year growth of 17%, driven by demand from women and stress-related health concerns [4]. - Probiotics: Market size exceeds 10 billion, focusing on gut health and extending to weight management, with top brands achieving over 1 billion in retail sales [4]. - Oral Beauty Supplements: Market size exceeds 10 billion, with high average prices and rapid growth in innovative ingredients [4]. - Basic Nutrients: Vitamins, minerals, and proteins have market sizes of 32.9 billion, 27.1 billion, and 11.6 billion respectively, with year-on-year growth rates of 3%, 5%, and 1% [4]. Competitive Landscape - The industry is experiencing a shift towards product innovation, with traditional brands facing competition from new entrants that leverage unique ingredients and formulations [3][4].

Group 1 - The health supplement market in China is expected to expand significantly, driven by new demographics and demands, with the vitamin and dietary supplement (VDS) market projected to reach 232.3 billion yuan in 2024, a year-on-year increase of 4% [2] - The market is characterized by high gross margins and marketing expenses, similar to the beauty industry, and is currently undergoing a transformative phase with lower concentration among leading brands [2][3] - New channels and consumer demands are anticipated to drive functionalization in the health supplement industry, creating opportunities for product innovation, particularly through content e-commerce platforms like Douyin [3] Group 2 - Specific categories within the health supplement market are experiencing rapid growth, including fish oil (market size 5-10 billion yuan), coenzyme Q10 (market size 4.1 billion yuan, year-on-year increase of 17%), probiotics (market size over 10 billion yuan), and oral beauty products (market size over 10 billion yuan) [4] - The basic nutrients segment, including vitamins, minerals, and proteins, has a market size of 32.9 billion, 27.1 billion, and 11.6 billion yuan respectively, with year-on-year growth rates of 3%, 5%, and 1%, but faces high product homogeneity [4]

Investment Rating - The investment rating for the social services industry is optimistic (maintained) [1] Core Insights - The report highlights the emergence of "spiritual sanctuaries" by trendy brands aimed at healing young people, with a focus on the scent economy and the rising trend of oral beauty products [1] - The domestic travel sector shows steady growth during the Dragon Boat Festival, with a significant increase in family and theme park visits [14][16] - The global trendy brand market has surpassed 1 trillion, with China's trendy clothing market expected to exceed 250 billion by 2025 [36][39] - The oral beauty market in China is projected to exceed 240 billion by 2024, with a compound annual growth rate of 3.8% from 2022 to 2025 [5][19] Summary by Sections 1. Travel and Tourism - Domestic travel during the Dragon Boat Festival saw approximately 444 million people traveling, a year-on-year increase of 8.5% [14] - The travel segment is bolstered by family-oriented activities, with theme parks experiencing a notable increase in visitor numbers [16] - Shaanxi Tourism has submitted an IPO application, showcasing strong profitability in its core performance arts business [18][21] 2. Trendy Brands - The global trendy brand apparel market reached 195.5 billion USD in 2023, with expectations to grow to 251.4 billion USD by 2030 [36][39] - The Chinese trendy apparel market is projected to exceed 250 billion RMB by 2025, with a year-on-year growth of 13.64% [37][42] - Brands like Pop Mart are expanding their reach into the trendy brand sector, particularly targeting male consumers [40] 3. Tea and Beverage - Bawang Chaji reported a GMV of 82.3 billion RMB in Q1 2025, with a net income of 33.9 billion RMB, reflecting a growth of over 35% [44][46] - The company plans to open 1,000 new stores in mainland China in 2025, accelerating its overseas expansion [45] 4. Beauty and Wellness - The oral beauty market is gaining traction, with a projected market size of over 240 billion RMB by 2024 [5][19] - The scent economy is also on the rise, with the fragrance market in China expected to grow from 50 billion RMB in 2018 to around 300 billion RMB by 2027 [5][19] - Major beauty brands are increasingly entering the oral beauty segment, indicating a shift from niche to mainstream consumption [53]